Tuesday, 26 June 2012

5 things we can learn about WOW from Zappos

Meeting
customer expectations is not enough. You need to work out how to WOW your
customers, ensure you exceed their expectations and anticipate
their needs before they even know they have them!

And you need to find ways to do this
consistently over time.

One
of the most exciting examples of WOW customer experience is Zappos (the biggest
online shoe retailer – now diversified into clothing and handbags - with
turnover in excess of $1bn). This is what we can learn...

1. Create purpose

At
the heart of Zappos’ purpose is creating happiness (for both employees and
customers). But this is not just printed on mousemats and
coffee mugs, gathering dust on people’s desks. It is at the heart of
everything that the company does, from the people it recruits to the way the
service is delivered.

Chief Exec Tony Hsieh
views Zappos as a service company that just happened to sell shoes. Happiness at
Zappos is exemplified by free delivery, 365 day free returns policy, employees
who are empowered to do whatever it takes to keep their customers happy, a
culture that embraces fun and quirkiness and a happiness movement with website,
books and blogs.

Delighting
customers even extends to directing them to competitors if they don’t have the
size, colour or style of shoe they are looking for. Why do they do all this? Because
they understand that delighting people, even if you don’t make the sale today, will make people come back to you again and again in the long run. And when people are happy they tell their friends and
family.

2. Really live your valuesAs soon as employees join the company they are involved in projects to
make the core values at Zappos live. Leaders demonstrate, talk about, and
structure activities that enliven values like “be humble”, “create fun and a
little weirdness,” and “do more with less.”

Every year
Zappos publishes its “Culture Book” in which all employees are encouraged to
write about what the culture means to them. TonyHsieh says of
culture “I can’t force the culture to happen; so part of people's job description
is to display and inspire the culture.”

3. Pay people to leave!Zappos
understand that at the heart of great customer experience are employees who are
motivated and committed to wowing their customers – whatever it takes. So along
with the expected interview processes for skills profiling and culture fit, Zappos
have another wonderfully quirky strategy.

They encourage their employees to leave. During the induction and
training period (which is 4 weeks long) employees are told "If you quit
today, we will pay you for the amount of time you've worked, plus we will offer
you a $1,000 bonus." Their thinking is that they want people who really, really
want to work for Zappos because committed employees will deliver better
customer experience.

Some people take up the offer. The rest stay and become Zappos fanatics.

4. Get the metrics right

Go to any online customer service department and you
will hear talk of minimizing call times and 1st time resolution.

At Zappos call centre time and resolution is not measured. There are no scripts. Call center
members do not up-sell. Zappos boasts the longest customer service call of 8hrs
23 mins! Whether this demonstrates that something is broken or that this was a
particularly difficult customer is not clear. But it does demonstrate the ethos
of whatever it takes to solve the customer problem.

The call
metrics focus on whether customer interactions have the potential to generate
more revenue for Zappos instead of how much it’s costing them. The ratings
are intangible (unlike call time) so it forces employees to focus purely on
customer happiness. They measure:

How likely
would you be to recommend Zappos to a friend or family member?

How likely
would you be to request the person you spoke with again?

How likely
would you be to recommend this person to a friend or coworker?

If you owned
your own business, how likely would you be to try to hire the person you spoke
with?

What Zappos measures is
customer happiness, and their success is demonstrated by repeat purchases (which make up 75% of
daily orders) and repeat customer spend (2.5x more than 1st time buyers).

The point is not that every customer service company should have these
metrics. It is more that every company should have the right metrics which
measure what’s important. And what’s important has to be related to the purpose
that the company is trying to fulfill for its customers.

5. Deliver what you say you will

Zappos delivery is underpinned by a business model and associated
processes which enable it to delight customers.

For instance, free
shipping listed as two-to-three days is frequently upgraded to overnight. This
service has to be backed by clearly defined, extremely efficient processes. To
do this, Zappos trains employees in
working capital principles so that they understand the impact on overall
profitability. The company also seeks to eliminate paper and manual processing
by working closely with suppliers to automate across the source-to-payment
process. Underpinning this is a principle never to outsource their competitive
advantage and to treat vendors well so that they can form long term
partnerships.

Warning: If your delivery processes are broken, if communication between
employees and departments is broken don't try to wow your customers. (Some companies do this a bit back to front
throwing in a coupon or freebie initiative to make up for a broken service). The fundamental priority should always be to deliver what you say
you will, when you say you will. So make sure you have the processes,
foundations and systems to deliver before you try to wow anyone.